The debate over international trade has been building. What was once confined to economics classrooms is now grabbing headlines across the country. We’ve heard the negative rhetoric about trade agreements and the Trans-Pacific Partnership (TPP) during the election process.
But what does the TPP and international trade actually mean for California?
In a nutshell: The TPP will create more opportunities for California agricultural producers, and businesses of all sizes across all industries, to sell more goods and services to consumers in TPP countries. In fact, the American Farm Bureau has estimated that the TPP will generate an additional $4.4 billion in net farm income.
Let’s look at a few facts. Thanks to trade, California is the No. 1 agricultural exporter in the country. In 2013, California exported $13.7 billion of agricultural goods to the world. Here in the Central Valley, we grow more than 250 crops, many of which are grown and exported from Fresno County’s nearly 2 million acres of farmland.
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Cargill is proud to be a part of California’s robust agricultural sector, employing more than 1,600 people in 15 locations throughout the state. From our beef processing facility here in Fresno to the seeds we sell ranchers across the state, international trade enables Cargill to continue innovating and growing to provide many of the inputs that fuel California’s vast agricultural export market.
Despite our export leadership, California farmers and ranchers are often at a disadvantage when selling abroad, because we face high foreign taxes. Today, agricultural goods coming out of California face tariffs as high as 40 percent in TPP partner countries, which represent some of the world’s most robust economies, such as Japan and Australia.
Trade agreements like the TPP level the playing field for California producers and workers by lowering tariffs and establishing clear rules on exports.
A quick review of the facts shows that trade agreements benefit California. Countries we have trade agreements with buy far more goods and services from us than others. In 2014, countries involved in trade agreements with the U.S. bought 10.3 times more goods per capita from California than countries without a trade agreement.
International trade also supports nearly 5 million jobs in California – more than one-fifth of all the jobs in the Golden State.
It is important to keep in mind that if Congress doesn’t pass this market-opening trade agreement, California agricultural producers will continue being forced to compete at a disadvantage; facing tariffs and other barriers, such as quotas that limit their ability to sell abroad and grow and create jobs here at home.
In addition, failure to pass the TPP will not result in the status quo. It puts America in the back seat as our economic competitors continue to ink trade deals that benefit their farmers, ranchers, and other businesses.
Congress should pass the TPP this year. The good news is our community is represented in Congress by a man who has long recognized the value of international trade, Rep. Jim Costa. The farmers and ranchers in the Central Valley applaud his commitment to creating new opportunities for job creators and economic progress, and encourage him to vote “yes” on the TPP.
Matt Leu is general manager at Cargill Beef in Fresno.